Despite the average price of gold being 14% higher for the first quarter than it was for the fourth quarter of 2005, AngloGold Ashanti (AU-N, AGG-A) suffered a decrease in revenue over the period.
On May 5 the company released first quarter results that showed revenue down to roughly US$735 million, from roughly US$739 million for the fourth quarter of 2005. Revenue for the same period last year was roughly US$662 million.
While selling its gold for an average price of $545 oz. just 2% under the spot price average of US$554 for the quarter and US$8 an oz. higher than rival Barrick Gold‘s (ABX-T, ABX-N) average selling price of US$537 an oz. lower production cut into the South African-based company’s bottom line.
Production was 10% lower at 1.3 millon oz. due to lower grades and fewer production shifts in South Africa. And while those two factors were anticipated, lower production at its Geita operation in Tanzania due to drought and then heavy rains, was not.
The hit to production and strong local operating currencies, sent total cash costs up 11% to $308 oz. Still, the company emphasizes, that figure is 4% below its mid-quarter guidance.
The company gave guidance for the second quarter, estimating production at roughly 1.5 million oz. at an average total cash cost of US$299 oz.
It estimates capital expenditure will be at US$230 million.
In New York on May 5, AngloGold’s shares were off 1.7% or 96 to US$55.02 on roughly 1.4 million shares traded.
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